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Government should avoid e-invoice mandate, says KPMG
28 March 2022
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Business must be allowed to adopt e-invoicing at its own pace and the government should defer mandating the technology until it has matured, said KPMG.
If a move to e-invoicing did become obligatory, then “a minimum of five years” was needed to implement the system successfully, the company said in a submission to the Treasury’s consultation on the matter.
It said events of the past two years had slowed progress and even converts to e-invoicing needed time.
“While many large businesses, such as KPMG, are already working to implement e-invoicing, there are many that have not started the often lengthy and costly journey, including due to the COVID-19 pandemic,” the submission said.
“The Commonwealth government itself, as one of the first-movers in this space which we commend, has yet to fully implement e-invoicing and share valuable lessons learnt.”
KPMG said wider consultation with Australia’s international peers was needed before wholesale adoption of the technology and government would need to work in partnership with businesses to share lessons learned and “build national interoperable standards and systems”.
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Company partner David Sofra said any move to invoke a Business E-invoicing Right (BER) – in which one business cannot refuse another’s request to use e-invoices – was unnecessary and not an efficient way to encourage uptake of the system.
“The approach of the BER appears to be that a business cannot deny another business’ request to use e-invoices, provided that business is captured by the mandatory phase-in implementation period, is listed on an e-invoicing register, and is not otherwise exempted. In KPMG’s view this approach seems administratively burdensome,” Mr Sofra said.
“KPMG considers that introducing the concept of a BER is contrary to the goal of reducing the administrative burden on all businesses and could potentially have the adverse effect; increasing payment times for small suppliers if the receiving business was to dispute the BER.
“Whilst KPMG strongly supports the initiative to increase adoption of e-invoicing, in our view the paper has not clearly articulated why a BER would be the best option or, in fact, necessary.”
Mr Sofra urged the government to continue working with the OECD to align standards and also assess the outcome of an EU Commission review.
“The government should engage with international peers to obtain further insights on their experience before implementing any mandatory e-invoicing adoption. KPMG notes that the European Commission has recently commenced its own stakeholder consultation on e-invoicing,” Mr Sofra said.
“Domestically, the Government should review its own processes and act on lessons learnt in relation to e-invoicing and related systems before imposing complex obligations on business.”
Mr Sofra said it would be important to take into account how e-invoicing would apply for businesses across different sizes, entities and services.
He warned that it might be impossible to standardise e-invoicing processes due to conflicting standards across professions, and exemptions would be required for different types of entities, as well as the number and nature of invoices being raised.
Government consideration was also needed on how to align e-invoicing with future tax compliance.
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